Friday, September 4, 2009

Biogen offers to buy Facet, though terms are less friendly (FACT, BIIB)

AlphaNinja - Strained relationship here. Biogen(BIIB) and Facet(FACT) have been working together for years:

Biogen Idec and Facet have been working together since 2005 under a collaboration agreement pursuant to which they have been jointly developing daclizumab for the treatment of relapsing multiple sclerosis and volociximab (M200) for the treatment of solid tumors.

According to a just-released filing, Biogen offered to acquire Facet in late August for $15 per share. There was a clear warning by Biogen CEO James Mullen:

"On August 21, I sent a letter to you and Facet’s Board of Directors stating Biogen Idec’s proposal to purchase Facet for $15 per share in cash. Our letter included the statement that “our offer assumes, and it is very important to Biogen Idec, that Facet does not undertake any material commercial or strategic transactions between now and the consummation of this transaction,” which reiterated what I communicated to you on our August 17 phone call. The Trubion collaboration is an example of such a transaction."

Facet didn't listen, and instead entered into a collaboration agreement with Trubion. Now the deal is more hostile, as Biogen has come back with a slightly lower price:

Facet shares are halted but will likely get a huge boost, so good for their shareholders. Management clearly was not interested in selling, and may have done a disservice to other shareholders by entering into that Trubion partnership simply to scuttle a deal with Biogen.It didn't have to be this way....reminds me of Tom Cruise walking away with his girl at the end of Cocktail.

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